VIDEO: ETF of the Week: JCPB

On this episode of the “ETF of the Week” podcast, VettaFi’s Head of Research, Todd Rosenbluth, discussed the JPMorgan Core Plus Bond ETF (JCPB) with Chuck Jaffe of Money Life. The pair discussed several topics related to the ETF, in order to give investors a deeper understanding of it.

Chuck Jaffe: One, fund on point for today. The expert to talk about it. This is the ETF of the Week! Yes, welcome to the ETF of the Week, where we get the latest take from Todd Rosenbluth. He’s the head of research at VettaFi. And if you go to ETFDb.com , which is a VettaFi site, you’re going to find all the tools you need to be a savvy or smarter ETF investor, and to get more details on the new, newsworthy, trending, and timely ETFs we talk about here!

Todd Rosenbluth: It’s great to be back, Chuck.

Chuck Jaffe: Your ETF of the Week is…

Todd Rosenbluth: The JPMorgan Core Plus Bond ETF. JCPB.

Chuck Jaffe: JCPB, the JPMorgan Core Plus Bond ETF, a blue-blood kind of fund from a blue-blood firm with a great track record. But what brings it into your sights this week?

Todd Rosenbluth: So, I was looking at flows this year, and actively managed fixed income ETFs have more than a third of the net new money that’s gone into fixed income ETFs. In fact, it’s closer to 40%. Active fixed income ETFs have been popular as investors try to navigate the challenges of the bond market. They’ve been turning to this JPMorgan fund, which [has]gathered about $1 billion in the past month. It’s gathered almost $5 billion this year. We think investors are already discovering it, and more people should learn more, given the demands of the ETF marketplace.

Chuck Jaffe: Performance has been very good for this fund. But what makes it stand out to you, compared to other actively managed bond funds? Because we’ve looked at a few of them here!

Todd Rosenbluth: We have. And I don’t think we’ve talked about JPMorgan’s suite of products, so that’s why I wanted to highlight it. You’re right. It is outperforming the Agg — that’s the reference point that many people have, that’s the Bloomberg Aggregate Bond Index. There’s a couple of ETFs, including AGG , that track it. This fund is outperforming the Agg. It’s actually outperforming its peers. I believe it has a four-star rating from Morningstar over its track record. It has a long track record. Active fixed income ETFs have been growing in size, in both popularity as well as supply. But this fund [has]more than six years of history that’s been quite strong. I think it manages its risk profile well, not taking on too much duration risk and adding in exposure to some other bond sectors you wouldn’t normally get exposure to within the Agg. And JPMorgan is just well known for their active ETF lineup.

Chuck Jaffe: You talk about it getting exposure to some bond sectors you might not have. This is a total bond market ETF. So, when it’s getting exposure to different sectors, is that just because it covers the whole thing, or is that a managerial tilt here?

Todd Rosenbluth: So, management has the ability to take on additional risk and invest in other asset classes, and has done so. You will find non-investment-grade corporate bonds in here. You’ll find agency bonds within it. There’ll be some exposure to treasuries and investment-grade corporates that you’d find. So I like that this fund has the flexibility. That’s the plus of a core plus bond strategy — it has the flexibility to invest in the best areas of the bond market according to management. And it’s taking advantage of it, and it’s working. It won’t always work. Obviously, taking on risk comes with risk, and as such, you might be punished. But I think JPMorgan does a good job of diversifying ac...